<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Kimberly-Clark Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
March 8, 2000
Kimberly-Clark Corporation
WAYNE R. SANDERS
Chairman of the Board and
Chief Executive Officer
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and management of Kimberly-Clark
Corporation, I cordially invite you to the Annual Meeting of Stockholders to be
held on Thursday, April 13, 2000, at 11:00 a.m. at the Corporation's World
Headquarters, 351 Phelps Drive, Irving, Texas.
At the Annual Meeting, stockholders will be asked to elect five directors
for a three-year term and approve the selection of the Corporation's independent
auditor. These matters are fully described in the accompanying Notice of Annual
Meeting and Proxy Statement.
It is important that your stock be represented at the meeting regardless
of the number of shares you hold. You are encouraged to specify your voting
preferences by marking and dating the enclosed proxy card, voting electronically
using the Internet or using the telephone voting procedures.
If you plan to attend the meeting, please check the card in the space
provided or so indicate electronically or by telephone. This will assist us with
meeting preparations, and will enable us to expedite your admittance. If your
shares are not registered in your own name and you would like to attend the
meeting, please ask the broker, trust, bank or other nominee which holds the
shares to provide you with evidence of your share ownership, which will enable
you to gain admission to the meeting.
Sincerely,
/s/ WAYNE R. SANDERS
Wayne R. Sanders
<PAGE> 3
KIMBERLY-CLARK CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 13, 2000
The Annual Meeting of Stockholders of KIMBERLY-CLARK CORPORATION will be
held at the Corporation's World Headquarters, 351 Phelps Drive, Irving, Texas,
on Thursday, April 13, 2000, at 11:00 a.m. for the following purposes:
1. To elect five directors for a three-year term to expire at the 2003
Annual Meeting of Stockholders;
2. To approve the selection of Deloitte & Touche LLP as independent
auditor; and
3. To take action upon any other business which properly may come
before the meeting or any adjournment thereof.
Stockholders of record at the close of business on February 14, 2000 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
It is important that your shares be represented at the meeting. I urge you
to sign, date and promptly return the enclosed proxy card in the enclosed
business reply envelope, or vote using the Internet or telephone.
The accompanying Proxy Statement also is used to solicit voting
instructions for the shares of the Corporation's common stock which are held by
the trustee of the Corporation's Salaried and Hourly Employees Incentive
Investment Plans and Retirement Contribution Plan for the benefit of the
participants in the plans. It is important that each participant in any of the
plans sign, date and return the voting instruction card which is enclosed with
the Proxy Statement in the business reply envelope provided or indicate his or
her preference using the Internet or telephone.
By order of the Board of Directors.
/s/ RONALD D. MCCRAY
Ronald D. Mc Cray
Vice President and Secretary
P. O. Box 619100
Dallas, Texas 75261-9100
March 8, 2000
<PAGE> 4
PROXY STATEMENT
KIMBERLY-CLARK CORPORATION
P. O. Box 619100
Dallas, Texas 75261-9100
March 8, 2000
INTRODUCTION
The accompanying proxy is solicited on behalf of the Board of Directors of
Kimberly-Clark Corporation for use at the Annual Meeting of Stockholders to be
held on April 13, 2000 and at any adjournment thereof.
Who Can Vote
Each stockholder of record at the close of business on February 14, 2000
will be entitled to one vote for each share registered in the stockholder's
name. As of that date, there were outstanding 551,425,485 shares of common stock
of the Corporation.
How You May Vote
You may vote in person by attending the meeting or by completing and
returning a proxy by mail, or vote using the Internet or the telephone. To vote
your proxy by mail, mark your vote on the enclosed proxy card, then follow the
instructions on the card. To vote your proxy using the Internet, see the
instructions on the proxy form and have the proxy form available when you access
the Internet website. The web-page will prompt you to enter your control number;
then follow the instructions to record your vote. You also may vote your proxy
by telephone as described on the proxy form.
The named proxies will vote your shares according to your directions. If
you do not make any of the selections, proxies will be voted for the election of
directors and the approval of the selection of the Corporation's independent
auditor.
How You May Revoke or Change Your Vote
You may revoke your proxy before the time of voting at the meeting in the
following ways:
- by mailing a revised proxy to the Secretary of the Corporation
- by changing your vote on the Internet website
- by using the telephone voting procedures
- by voting in person at the meeting
Confidential Voting
Stockholders' proxies are received by the Corporation's independent proxy
processing agent, and the vote is certified by independent Inspectors of
Election. Proxies and ballots that identify the vote of stockholders will be
kept confidential, except as necessary to meet legal requirements, in cases
where stockholders request disclosure or write comments on their proxy cards, or
in a contested matter involving an opposing proxy solicitation. During the proxy
solicitation period, the Corporation will receive vote tallies from time to time
from the independent proxy processing agent, but the tallies will provide
aggregate data rather than names of stockholders. In addition, the agent will
notify the Corporation if a stockholder has failed to vote so that he or she may
be reminded and requested to do so.
<PAGE> 5
Costs of Solicitation
The Corporation will bear the cost of preparing, printing and mailing
materials in connection with this solicitation of proxies including the cost of
the proxy solicitation, the expenses of brokers, fiduciaries and other nominees
in forwarding proxy material to beneficial owners. In addition to the use of the
mail, solicitation may be made by telephone or otherwise by regular employees of
the Corporation. The Corporation has retained W.F. Doring & Co., Inc. to aid in
the solicitation at a cost of approximately $10,000, plus reimbursement of
out-of-pocket expenses.
Votes Required/Voting Procedures
A majority of the shares of the Corporation's common stock, present in
person or represented by proxy, shall constitute a quorum for purposes of the
Annual Meeting. Directors shall be elected by a plurality of the votes present
in person or represented by proxy at the Annual Meeting and entitled to vote on
the election of directors. In all matters other than the election of directors,
the affirmative vote of a majority of shares present in person or represented by
proxy at the Annual Meeting and entitled to vote on the subject matter shall be
the act of the stockholders. Abstentions are treated as votes against a proposal
and broker non-votes have no effect on the vote.
Dividend Reinvestment and Stock Purchase Plan
The Corporation is mailing this Proxy Statement and voting materials,
together with the 1999 Annual Report to Stockholders, to the stockholders on
March 8, 2000. If a stockholder is a participant in the Corporation's Automatic
Dividend Reinvestment and Stock Purchase Plan, the proxy card represents the
number of full shares in the stockholder's account in the plan, as well as
shares registered in the stockholder's name.
Employee Benefit Plans
The Corporation also is mailing on March 8, 2000 this Proxy Statement and
voting materials, together with the 1999 Annual Report to Stockholders, to each
participant in the Corporation's Salaried and Hourly Employees Incentive
Investment Plans and Retirement Contribution Plan. The trustee of the
Corporation's plans, U.S. Bank, as the stockholder of record of shares of the
common stock of the Corporation held in the plans, will vote whole shares of
stock attributable to each participant's interest in the plans in accordance
with the directions the participant gives, or, if no directions are given by the
participant, in accordance with the directions of the respective plan committee.
PROPOSAL 1. ELECTION OF DIRECTORS
GENERAL INFORMATION
The Restated Certificate of Incorporation of the Corporation provides that
the Board of Directors shall consist of not less than 11 nor more than 25
members, as determined from time to time by the affirmative vote of a majority
of the entire Board of Directors, and that the Board shall be divided into three
classes. Directors of one class are elected each year for a term of three years.
As of the date of this Proxy Statement, the Board of Directors consists of 13
members, including Thomas J. Falk who was elected to the Board by the Board of
Directors on November 16, 1999. Five of the directors (including Mr. Falk) have
terms which expire at this year's Annual Meeting (Class of 2000), four have
terms which expire at the 2001 Annual Meeting (Class of 2001), and four have
terms which expire at the 2002 Annual Meeting (Class of 2002).
The five nominees for director set forth on the following pages are
proposed to be elected at the Annual Meeting to serve for a term to expire at
the 2003 Annual Meeting of Stockholders (Class of 2003) and until their
successors are elected and have qualified. Should any nominee become unable to
serve, proxies may be voted for another person designated by management. All
nominees have
2
<PAGE> 6
advised the Corporation that they will serve if elected. The remaining eight
directors will continue to serve as directors for the terms set forth on the
following pages, except for Mr. Levy (a director of the Class of 2001), who will
reach the mandatory retirement age of 68 on November 16, 2000, at which time he
plans to retire as a member of the Board of Directors and Mr. McPherson (a
director of the Class of 2002), who will reach the mandatory retirement age of
68 on April 29, 2001, at which time he also plans to retire as a member of the
Board of Directors.
The nominees for director are such that immediately after the election of
the nominees to the Board of Directors, a majority of all directors holding
office shall be "Independent Directors" as that term is defined in By-Law 24 of
the Corporation's By-Laws. Generally, By-Law 24 provides that individuals are
Independent Directors if they are not employed by the Corporation or its
subsidiaries or equity companies and do not have, and are not affiliated with an
entity that has, business transactions or relationships with the Corporation or
its subsidiaries that are required to be disclosed in the Corporation's proxy
statement. The By-Law authorizes the Audit Committee of the Board of Directors
to determine that an individual who has a transaction or relationship disclosed
in the proxy statement is nevertheless an Independent Director if it determines
by resolution that the person is independent of management and free from any
relationship that would interfere with the person's independent judgment as a
Board member.
3
<PAGE> 7
CERTAIN INFORMATION REGARDING DIRECTORS AND NOMINEES
The names of the directors continuing in office and nominees, their ages as
of the date of the Annual Meeting, the year each first became a director, their
principal occupations during at least the past five years, other directorships
held by each as of the date hereof and certain other biographical information
are set forth on the following pages by Class, in the order of the next Class to
stand for election.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE
2003 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 2003)
<TABLE>
<S> <C>
THOMAS J. FALK President and Chief
Operating Officer
Mr. Falk, age 41, has served as President and Chief
Operating Officer of the Corporation since his election on
November 16, 1999. He previously had been elected Group
President - Global Tissue, Pulp and Paper in 1998,
responsible for the Corporation's global tissue businesses.
He also was responsible for the Wet Wipes and Neenah Paper
sectors, Pulp Operations and Consumer Business Services,
[Photo] Environment and Energy and Human Resources organizations.
Mr. Falk joined the Corporation in 1983. His prior
responsibilities have included internal audit, finance and
strategic analysis, and operations management. In 1993, he
was elected Group President - Infant and Child Care and has
held various senior management positions in the
Corporation's Consumer and Away From Home businesses in
North America and Europe since that time. Mr. Falk is a
member of the University of Wisconsin-Madison School of
Business Dean's Advisory Board and serves on the Board of
Directors of Newell Rubbermaid Inc. He has been a director
of the Corporation since November 1999.
- -----------------------------------------------------------------------------------------
WILLIAM O. FIFIELD Partner
Sidley & Austin
Mr. Fifield, age 53, has served as a partner in the law firm
of Sidley & Austin since 1977. He is the managing partner in
the firm's Dallas, Texas office, a member of the firm's
executive committee, and a member of the firm's space and
[Photo] new business committees. He has served the firm in a number
of other administrative capacities, including co-chair of
the firm's committee on computers and legal technology,
co-chair of the firm's committee on practice development,
and a member of the firm's committees on accounting and
finance, assignment and compensation of associates, firm
functions, and international operations. He has been a
director of the Corporation since 1995.
- -----------------------------------------------------------------------------------------
WAYNE R. SANDERS Chairman of the Board
and Chief Executive Officer
Mr. Sanders, age 52, has served as Chief Executive Officer
of the Corporation since 1991 and Chairman of the Board of
the Corporation since 1992. He previously had been elected
President and Chief Operating Officer in 1990. Employed by
[Photo] the Corporation since 1975, Mr. Sanders also has held
various other senior management positions in the
Corporation. Mr. Sanders is a director of Adolph Coors
Company, Coors Brewing Company, Texas Instruments
Incorporated and Chase Bank of Texas, National Association.
He also is a member of the Marquette University Board of
Trustees, is a national trustee of the Boys and Girls Clubs
of America and is a member of the advisory board of the
Dallas-Fort Worth Directors Roundtable. He has been a
director of the Corporation since 1989.
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</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C>
WOLFGANG R. SCHMITT Chairman of the Board
Value America, Inc.
Mr. Schmitt, age 56, has served as Chairman of the Board of
Value America, Inc. since November 1999 and as Vice Chairman
[Photo] of the Board of Newell Rubbermaid Inc. since its inception
on March 24, 1999 as a result of the merger of Newell Co.
and Rubbermaid Incorporated. Prior to the merger, he had
served as Chairman of the Board of Rubbermaid Incorporated
since 1993, and as Chief Executive Officer since 1992. Mr.
Schmitt is a director of Parker Hannifin Corporation, and
serves as a trustee of Otterbein College. He has been a
director of the Corporation since 1994.
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RANDALL L. TOBIAS Chairman Emeritus
Eli Lilly and Company
Mr. Tobias, age 58, served as Chairman of the Board and
Chief Executive Officer of Eli Lilly and Company from June
1993 until June 30, 1998. He served as Executive Chairman of
Eli Lilly and Company until his retirement on December 31,
[Photo] 1998 and is serving as Chairman Emeritus since his
retirement. He previously had been Vice Chairman of the
Board of AT&T since 1986, and had been employed by AT&T
since 1964. Mr. Tobias is a director of Phillips Petroleum,
Inc., Agilent Technologies, Inc. and Knight-Ridder, Inc. He
is a member of the Business Council. He is chairman of the
board of trustees of Duke University and a trustee of the
Colonial Williamsburg Foundation. He has been a director of
the Corporation since 1994.
=========================================================================================
</TABLE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE
2001 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 2001)
<TABLE>
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PASTORA SAN JUAN CAFFERTY Professor
University of Chicago
Mrs. Cafferty, age 59, has been a Professor since 1985 at
the University of Chicago's School of Social Service
Administration where she has been a member of the faculty
[Photo] since 1971. Mrs. Cafferty is a director of the Peoples'
Energy Corporation, Bankmont Financial Corporation and its
subsidiaries, Harris Trust and Savings Bank, Harris Bancorp,
Inc. and Waste Management Holdings, Inc. and a Trustee of
the Lyric Opera Association and Rush-Presbyterian-St. Luke's
Medical Center in Chicago. She has been a director of the
Corporation since 1976.
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</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C>
CLAUDIO X. GONZALEZ Chairman of the Board
and Managing Director
Kimberly-Clark de Mexico, S.A. de C.V.
Mr. Gonzalez, age 65, has served as Chairman of the Board
and Managing Director of Kimberly-Clark de Mexico, S.A. de
C.V., an equity company of the Corporation and a producer of
disposable consumer products, pulp, and writing and other
[Photo] papers, since 1973. He was employed by the Corporation in
1956 and by Kimberly-Clark de Mexico, S.A., the predecessor
of Kimberly-Clark de Mexico, S.A. de C.V., in 1957. He is a
director of Kellogg Company, General Electric Company,
Unilever N.V., Unilever PLC, The Mexico Fund, Planet
Hollywood International, Banco Nacional de Mexico, Grupo
Industrial ALFA, Grupo Modelo, Grupo Carso, Telefonos de
Mexico and Televisa, and is a member of the International
Advisory Council of J.P. Morgan. He has been a director of
the Corporation since 1976.
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LOUIS E. LEVY Retired Partner and Vice Chairman
KPMG Peat Marwick
Mr. Levy, age 67, served as a partner of KPMG Peat Marwick
or its predecessor firms from 1968 until his retirement from
that firm in 1990. He had been a member of the board of
directors of KPMG Peat Marwick or its predecessor firms from
[Photo] 1978 until his retirement. In addition, he was Vice Chairman
of KPMG Peat Marwick, responsible for Professional Standards
and Quality Assurance. Mr. Levy is a member of the board of
directors of Household International, Inc., the Deutsche
Bank/Alex Brown/Flag Investors Group of Mutual Funds and the
ISI Group of Mutual Funds. He is Chairman Emeritus of the
National Multiple Sclerosis Society. He has been a director
of the Corporation since 1991.
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LINDA JOHNSON RICE President and Chief Operating Officer
Johnson Publishing Company, Inc.
Mrs. Johnson Rice, age 42, has been President and Chief
[Photo] Operating Officer of Johnson Publishing Company, Inc., a
multi-media company, since 1987. She joined that company in
1980, and became Vice President in 1985. Mrs. Johnson Rice
is a director of Bausch & Lomb Incorporated and Viad
Corporation. She has been a director of the Corporation
since 1995.
=========================================================================================
</TABLE>
6
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TERM EXPIRING AT THE
2002 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 2002)
<TABLE>
<S> <C>
JOHN F. BERGSTROM Chairman and Chief Executive Officer
Bergstrom Corporation
Mr. Bergstrom, age 53, has served as Chairman and Chief
Executive Officer of Bergstrom Corporation, Neenah,
Wisconsin, for more than the past five years. Bergstrom
Corporation owns and operates automobile sales and leasing
[Photo] businesses and a credit life insurance company in Wisconsin.
Mr. Bergstrom is a director of the Wisconsin Energy
Corporation, Universal Foods Corporation, Banta Corporation,
The Catholic Diocese of Green Bay, The First National
Bank-Fox Valley, Midwest Express Holdings, Inc., and the
Green Bay Packers. He also is a member of the Board of
Trustees of Marquette University and the Medical College of
Wisconsin. He has been a director of the Corporation since
1987.
- -----------------------------------------------------------------------------------------
PAUL J. COLLINS Vice Chairman
Citigroup Inc.
Mr. Collins, age 63, has been Vice Chairman of Citigroup
Inc. since its inception in October of 1998 as a result of
the merger of Citicorp and Travelers Group Inc. Prior to the
merger, Mr. Collins was a Vice Chairman of Citicorp and its
principal subsidiary, Citibank, N.A., since 1988. He
[Photo] previously was elected Senior Corporate Officer and Chief
Planning Officer of those companies in 1985, and Group
Executive of those companies in 1984. He joined Citicorp in
1961 and served as Executive Vice President prior to
becoming Group Executive. He is a director of Citicorp,
Citibank, N.A. and Nokia Corporation. Mr. Collins is a
trustee of Carnegie Hall Corporation, the Central Park
Conservancy, and the Glyndebourne Arts Trust. He has been a
director of the Corporation since 1983.
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ROBERT W. DECHERD Chairman of the Board, President,
and Chief Executive Officer
Belo Corp.
Mr. Decherd, age 49, has served as Chairman of the Board and
[Photo] Chief Executive Officer of Belo Corp., a broadcasting and
publishing company, since January 1987. Mr. Decherd became
President of that company in January 1994, and previously
served as President from January 1985 through December 1986.
He has been a director of that company since 1976. Mr.
Decherd is a director of the Tomas Rivera Policy Institute
and Geocast Network Systems, Inc. He has been a director of
the Corporation since 1996.
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</TABLE>
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<TABLE>
<S> <C>
FRANK A. MCPHERSON Retired Chairman of the Board
and Chief Executive Officer
Kerr-McGee Corporation
Mr. McPherson, age 66, served as Chairman of the Board and
Chief Executive Officer of Kerr-McGee Corporation, a natural
resources company, from 1983 until his retirement from these
offices on February 1, 1997. He joined Kerr-McGee
Corporation in 1957 and held various assignments in oil,
natural gas and coal operations and chemical manufacturing.
[Photo] Mr. McPherson is a director of Conoco Inc., Tri-Continental
Corporation, Seligman Quality Fund, Inc., Seligman Select
Municipal Fund, Inc., Seligman Group of Mutual Funds, and
Bank of Oklahoma Financial Corporation. Mr. McPherson also
is a member of the board of trustees of the Oklahoma Nature
Conservancy, and the Southwest Region Board of Trustees of
the Boys and Girls Clubs of America. He is a former
President of the Oklahoma Foundation for Excellence in
Education and a former director of the Federal Reserve Bank
of Kansas City. He has been a director of the Corporation
since 1990.
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</TABLE>
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 31, 1999
regarding the number of shares of the common stock of the Corporation
beneficially owned by all directors and nominees, by each of the executive
officers named in "Executive Compensation" below, and by all directors, nominees
and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF
IDENTITY OF GROUP BENEFICIAL OWNERSHIP(1)(2)(3)
--------------------- ------------------------------
<S> <C>
John F. Bergstrom........................................... 17,000(4)
Pastora San Juan Cafferty................................... 5,734(5)
Paul J. Collins............................................. 10,400(5)
Robert W. Decherd........................................... 9,600(6)
John W. Donehower........................................... 315,810(7)(8)
O. George Everbach.......................................... 336,947(7)
Thomas J. Falk.............................................. 354,767(7)
William O. Fifield.......................................... 6,400(5)
Claudio X. Gonzalez......................................... 144,438
Louis E. Levy............................................... 5,800(5)
Frank A. McPherson.......................................... 8,600(5)(9)
Linda Johnson Rice.......................................... 4,400
Wayne R. Sanders............................................ 1,160,489(7)
Wolfgang R. Schmitt......................................... 3,400(5)
Kathi P. Seifert............................................ 322,259(7)
Randall L. Tobias........................................... 9,400(5)
All directors, nominees and executive officers as a group... 2,943,557(7)(10)
</TABLE>
- ---------------
(1) Except as otherwise noted, the directors, nominees and named executive
officers, and the directors, nominees and executive officers as a group,
have sole voting and investment power with respect to the shares listed.
(2) Each director, nominee and named executive officer, and all directors,
nominees and executive officers as a group, own less than one percent of
the outstanding shares of the Corporation's common stock.
(3) For each director who is not an officer or employee of the Corporation or
any of its subsidiaries or equity companies, share amounts include shares
issued pursuant to the Outside Directors' Stock Compensation Plan. See
"Executive Compensation -- Compensation of Directors."
(4) Includes 1,600 shares held by a trust for Mr. Bergstrom's son and daughter
for which Mr. Bergstrom serves as trustee. Also includes 5,000 shares held
by Bergstrom Investments L.P., a partnership of which Mr. Bergstrom and his
brother are general partners and their respective children are limited
partners, and of which Mr. Bergstrom shares voting control.
(5) In addition to the shares listed in the table which are beneficially owned,
the following directors have stock credits allocated to their deferred
compensation accounts as of December 31, 1999 under the Corporation's
deferred compensation plan for directors: Mrs. Cafferty, 21,911 credits;
Mr. Collins, 46,173 credits; Mr. Fifield, 4,839 credits; Mr. Levy, 7,038
credits; Mr. McPherson, 1,459 credits; Mr. Schmitt, 6,107 credits; and Mr.
Tobias, 7,258 credits. The accounts reflect the election of the directors
to defer into stock credits compensation previously earned by them as
directors of the Corporation. Although these directors are fully at risk as
to the price of the Corporation's common stock represented by stock
credits, the stock credits are not shares of stock and the directors do not
have any rights as holders of common stock with respect to the stock
credits. See "Executive Compensation -- Compensation of Directors" for
additional information concerning the deferred stock accounts.
(6) Includes 1,200 shares held by Mr. Decherd's son, who has sole voting and
investment power with respect to the shares.
(7) Includes the following shares which could be acquired within 60 days of
December 31, 1999 by: Mr. Donehower, 216,160 shares; Mr. Everbach, 260,518
shares; Mr. Falk, 271,008 shares; Mr. Sanders, 801,440 shares; Ms. Seifert,
284,056 shares; and all directors, nominees and executive officers as a
group, 2,025,564 shares. Also, shares of common stock held by the trustee
of the Corporation's Salaried Employees Incentive Investment Plan for the
benefit of, and which are attributable to the accounts in the plan of, the
respective directors, nominees and executive officers above are included in
this table.
(8) Includes 454 shares held by Mr. Donehower's daughter with respect to which
Mr. Donehower shares voting and investment power with his daughter.
(9) Mr. McPherson shares voting and investment power with respect to 6,200
shares.
(10) Voting and investment power with respect to 11,654 of the shares is shared.
9
<PAGE> 13
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
In 1999, the Corporation and certain of its subsidiaries retained the legal
services of Sidley & Austin. William O. Fifield, a director of the Corporation,
is a partner in that firm.
The Corporation paid $147,000 to Bergstrom Corporation in 1999 for
automobile rental and purchasing costs. John F. Bergstrom and Richard A.
Bergstrom, his brother, own 75 percent and 25 percent, respectively, of
Bergstrom Corporation. In addition, the Corporation leases office space in
Neenah, Wisconsin from Neenah Downtown Redevelopment Associates Limited
Partnership, a partnership engaged in the redevelopment of downtown real estate.
John F. Bergstrom owns a 14 percent limited partner interest in the partnership.
During 1999, rental payments made by the Corporation to the partnership were
$695,000.
Management believes that the amounts charged and paid in connection with
the foregoing arrangements were reasonable compared with the amounts which would
be charged and paid for similar services or products from other third parties.
The Corporation expects to engage in similar transactions with those entities in
2000.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met nine times in 1999. All of the incumbent
directors attended at least 75 percent of the total number of meetings of the
Board and committees of the Board on which they served.
The standing committees of the Board include, among others, the Audit
Committee, the Compensation Committee and the Nominating Committee.
The Audit Committee, currently composed of Mr. Collins, Chairman, Mr.
Decherd, Mrs. Johnson Rice, and Mr. Schmitt, met five times during 1999. The
Committee selects, subject to stockholder approval, and engages an independent
auditor to audit the books, records and accounts of the Corporation, determines
the scope of the audits, and establishes policy in connection with internal
audit programs of the Corporation.
The Compensation Committee, currently composed of Mr. Levy, Chairman, Mrs.
Cafferty, Mr. McPherson and Mr. Tobias, met three times during 1999. The nature
and scope of the Committee's responsibilities are set forth below under
"Executive Compensation -- Board Compensation Committee Report on Executive
Compensation."
The Nominating Committee, currently composed of Mr. McPherson, Chairman,
Mrs. Cafferty, Mr. Decherd and Mr. Levy, met twice during 1999. The Committee
proposes and considers suggestions for candidates for membership on the Board,
and recommends candidates to the Board to fill Board vacancies. It also proposes
to the Board a slate of directors for submission to the stockholders at the
Annual Meeting.
STOCKHOLDER NOMINATIONS FOR DIRECTORS
The Nominating Committee of the Board of Directors considers nominees
recommended by stockholders as candidates for election to the Board of Directors
at the Annual Meeting of Stockholders. A stockholder wishing to nominate a
candidate for election to the Board at the Annual Meeting is required to give
written notice to the Secretary of the Corporation of his or her intention to
make a nomination. The notice of nomination must be received by the Corporation
not less than 50 days nor more than 75 days prior to the stockholders' meeting,
or if the Corporation gives less than 60 days notice of the meeting date, the
notice of nomination must be received within 10 days after the meeting date is
announced. The notice of nomination is required to contain certain information
about both the nominee and the stockholder making the nomination. The
Corporation may require that the proposed nominee furnish other information to
determine that person's
10
<PAGE> 14
eligibility to serve as a director. A nomination which does not comply with the
above procedure will be disregarded.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for each
of 1997, 1998 and 1999 awarded to, earned by, or paid to the chief executive
officer and the four most highly compensated executive officers of the
Corporation, other than the chief executive officer, whose total annual salary
and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ----------------------- ---------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- --------------------------- ---- --------- --------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wayne R. Sanders 1999 950,000 1,900,800(1) 2,339 0 400,000 0 4,800
Chairman of the Board 1998 950,000 367,488(1) 3,414 0 210,000 0 4,800
and Chief Executive Officer 1997 950,000 232,320(1) 3,506 0 180,000 1,792,841 4,800
John W. Donehower 1999 410,000 512,400(1) 0 0 60,000 334,341 4,800
Senior Vice President 1998 395,000 121,800 1,576 0 48,000 0 4,800
and Chief Financial Officer 1997 370,000 77,000 1,448 0 48,000 0 4,800
O. George Everbach 1999 420,000 512,400 396 0 70,000 0 4,800
Senior Vice President - Law 1998 405,000 121,800 0 0 48,000 0 4,800
and Government Affairs 1997 375,000 77,000 656 0 48,000 0 4,800
Thomas J. Falk 1999 465,000 673,440(1) 3,400 338,188 100,000 0 4,800
President and 1998 425,000 289,425(1) 1,045 0 60,000 0 4,800
Chief Operating Officer 1997 400,000 114,204(1) 3,510 0 60,000 136,165 4,800
Kathi P. Seifert 1999 410,000 585,600 0 289,875 70,000 200,604 4,800
Executive Vice President 1998 385,000 141,288 8,586 0 48,000 0 4,800
1997 350,000 220,000 1,837 0 48,000 136,165 4,800
</TABLE>
- ---------------
(1) Includes amounts voluntarily deferred by the executive officer under the
Corporation's Deferred Compensation Plan. The Deferred Compensation Plan
allows executive officers to defer portions of current base salary and bonus
compensation otherwise payable during the year. See "Board Compensation
Committee Report on Executive Compensation-Tax Deduction for Executive
Compensation" below for a more complete description of the plan.
(2) Amounts shown consist of amounts reimbursed for federal and state income
taxes on certain personal and spousal travel required for company purposes,
and reimbursements by the Corporation of certain educational expenses
incurred by executive officers pursuant to the Corporation's Educational
Opportunities Plan. The value of these amounts did not, for any of the
executive officers named above, exceed, in the aggregate, $50,000 in 1997,
1998 or 1999.
(3) Restricted stock awards are granted pursuant to the Corporation's 1999
Restricted Stock Plan and are valued at the closing price of the
Corporation's stock on the date of grant, February 24, 1999 ($48.3125). The
shares vest 100 percent on February 24, 2004. As of December 31, 1999, the
number and value (based on the December 31, 1999 stock price of $65.44 per
share) of total shares of restricted stock held by the executive officers
are: Mr. Falk (7,000 shares; $458,080) and Ms. Seifert (6,000 shares;
$392,640). Dividends are paid on restricted stock at the same rate paid to
all stockholders of the Corporation. See "Board Compensation Committee
Report on Executive Compensation-Restricted Stock Plan" below for a more
complete description of the plan.
(4) The Corporation paid a stock dividend on April 2, 1997 to stockholders of
record on March 7, 1997 in order to effect a two-for-one stock split of the
Corporation's common stock (the "Stock Split"). The options are shown on a
post-Stock Split basis.
(5) Participation share payments are made pursuant to the 1992 Equity
Participation Plan (the "1992 Plan"). Each participation share is assigned a
base value equal to the book value of one share of the Corporation's common
stock as of the close of the fiscal year immediately prior to the award. The
value is adjusted each quarter based on multiplying dividends declared per
share of the Corporation's common stock during the quarter by the total
number of participation shares and dividend shares in the participant's
account. The normal maturity date of a participation share award is the
close of the fiscal year in which the fifth or seventh anniversary of the
date of the award occurs. The participant is entitled to receive a cash
payment equal to the sum of (i) the increase (if any) in book value of the
participation shares on the maturity date of the award over the base value
of the shares, and (ii) the book value of the dividend shares on the
maturity date (equal to the book value of an equivalent number of shares of
the Corporation's common stock). In addition, the 1992 Plan provides that up
to 50 percent of the payment of matured participation share awards may be
made in the form of the Corporation's common stock as determined by the
Compensation Committee when the award was granted.
(6) Amounts shown consist solely of the Corporation's matching contributions
under the Corporation's Salaried Employees Incentive Investment Plan.
11
<PAGE> 15
The policies and practices of the Corporation pursuant to which the
compensation set forth in the Summary Compensation Table was paid or awarded are
described under "Board Compensation Committee Report on Executive Compensation"
below.
The following table sets forth information concerning grants of stock
options during 1999 to each of the executive officers named in the Summary
Compensation Table and the potential realizable value of the options at assumed
annual rates of stock price appreciation for the option term.
OPTION GRANTS IN 1999(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL POTENTIAL REALIZABLE VALUE AT
UNDERLYING OPTIONS ASSUMED ANNUAL RATES OF STOCK
OPTIONS GRANTED TO EXERCISE OR PRICE APPRECIATION FOR OPTION TERM(2)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 0%($) 5%($) 10%($)
---- ---------- ------------ ----------- ---------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wayne R. Sanders.............. 400,000 7.6 48.3125 2/23/09 0 12,153,389 30,799,073
John W. Donehower............. 60,000 1.1 48.3125 2/23/09 0 1,823,008 4,619,861
O. George Everbach............ 70,000 1.3 48.3125 2/23/09 0 2,126,843 5,389,838
Thomas J. Falk................ 100,000 1.9 48.3125 2/23/09 0 3,038,347 7,699,768
Kathi P. Seifert.............. 70,000 1.3 48.3125 2/23/09 0 2,126,843 5,389,838
</TABLE>
- ---------------
(1) The plans governing stock option grants provide that the option price per
share shall be no less than 100 percent of the market value per share of the
Corporation's common stock at the date of grant. The term of any option is
no more than 10 years from the date of grant. Options granted in 1999 become
exercisable 30 percent after the first year following the grant thereof, an
additional 30 percent after the second year and the remaining 40 percent
after the third year; provided however, that all of the options become
exercisable for three years upon death or total or permanent disability, and
for five years upon the retirement of the officer. The options may be
transferred by the officers to family members or certain entities in which
family members have interests.
(2) The dollar amounts under these columns are the result of calculations
assuming annual rates of stock price appreciation over the option term at
the 5% and 10% rates set by, and the 0% rate permitted by, Securities and
Exchange Commission rules and are not intended to forecast possible future
appreciation, if any, in the Corporation's stock price.
The following table sets forth information concerning exercises of stock
options during 1999 by each of the executive officers who is named in the
Summary Compensation Table and the value of each officer's unexercised options
as of December 31, 1999 based on a closing stock price of $65.44 per share of
the Corporation's common stock on that date:
AGGREGATED OPTION EXERCISES IN 1999
AND OPTION VALUES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, DECEMBER 31,
ACQUIRED VALUE 1999(#) 1999($)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
Wayne R. Sanders.............................. 313,278 12,434,749 546,439 13,758,151
619,001 9,358,010
John W. Donehower............................. 74,446 2,891,855 164,559 4,155,743
112,801 1,643,110
O. George Everbach............................ 0 0 205,917 5,842,426
122,801 1,814,360
Thomas J. Falk................................ 85,728 3,121,142 199,007 5,227,415
166,001 2,482,010
Kathi P. Seifert.............................. 24,936 1,027,014 229,455 7,168,979
122,801 1,814,360
</TABLE>
12
<PAGE> 16
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation is
composed entirely of Independent Directors. See "Proposal 1. Election of
Directors -- General Information." The Board designates the members and the
Chairman of the committee. The Compensation Committee also constitutes the stock
option committee for the stock option plans of the Corporation disclosed in this
Proxy Statement. In addition, the Compensation Committee is responsible for
establishing and administering the policies governing annual compensation,
restricted stock awards and long-term incentive awards. The Compensation
Committee periodically evaluates the Corporation's compensation programs, and
compares them with those of other companies, both within the Corporation's peer
industry group and other large industrial companies.
The companies the Compensation Committee uses for making base salary
comparisons include some, but not all, of the companies appearing in the indexes
of the performance graph below. The first group used for comparison is composed
of 22 companies which have significant consumer businesses (the "Consumer
Company Group"), of which the Corporation is about median in terms of annual
sales and with which the Corporation competes in its businesses and/or for
executive talent. The second group used for comparison is composed of 31
industrial companies with annual sales exceeding $5 billion (the "Industrial
Company Group"), of which the Corporation is about median in terms of annual
sales. Written salary information concerning the compensation practices of these
two groups of companies was provided to the Corporation by two independent
consultants.
In determining the compensation to be paid to executive officers in 1999,
the Compensation Committee employed compensation policies designed to align
compensation with the Corporation's overall business strategy, values and
management initiatives. These policies are intended to (i) reward executives for
long-term strategic management and the enhancement of stockholder value through
stock option, restricted stock and long-term incentive awards, (ii) support a
performance-oriented environment that rewards achievement of internal company
goals and recognizes company performance compared to the performance of
similarly situated companies and of other large industrial companies through the
annual payment of cash bonuses, and (iii) attract and retain executives whose
abilities are considered essential to the long-term success and competitiveness
of the Corporation through the Corporation's salary administration program.
Salaries for 1999
In determining base salaries of executive officers, the Compensation
Committee compares the executive officers' salaries to those for similar
positions in the two groups of companies referred to above, with primary
emphasis placed upon the Consumer Company Group so that the Committee may
compare data on specific salary levels for comparable positions. The
Compensation Committee's policy is to set executive officers' salaries at or
near the median salary level of these companies, with the salary of the Chief
Executive Officer set at or near the median salary level for chief executive
officers of the Consumer Company Group (see "1999 Compensation of the Chief
Executive Officer" below). In implementing the policy, the Compensation
Committee also considers the individual performance of the officer, the
performance of the unit over which the officer has responsibility (primarily
based upon growth in the operating profit of the unit), the performance of the
Corporation (primarily based upon growth in earnings per share and shareholder
return), and the officer's tenure. No specific weight is assigned to any
individual factor. Salary actions taken by the Compensation Committee with
respect to the executive officers in 1999 were consistent with the policies and
practices described above.
Cash Bonus Awards for 1999
The cash bonus awards for 1999 set forth in the Summary Compensation Table
were based on the Corporation's Management Achievement Award Program. The
Compensation Committee's policy is to provide opportunities to an executive
officer for cash bonuses under the program which,
13
<PAGE> 17
together with his or her base salary, are within the third quartile (that
quartile between the 50th and 75th percentiles) of compensation for the
Industrial Company Group if the officer's goals have been fully met during the
year. In determining the target cash bonus awards, the Compensation Committee
considers data for the Industrial Company Group and periodically reviews data
for the Consumer Company Group.
Actual annual cash bonus awards are determined by measuring performance
against specific goals established at the beginning of each year. The goals for
1999 took into account, depending on the responsibility of the individual, the
performance of the group or unit with which the individual is associated
(primarily based upon growth in the operating profit of the unit) and the
overall performance of the Corporation (based upon the Corporation's long-term
goal of maintaining growth in earnings per share from operations (the "EPS
Goal") and its long-term goal of exceeding the S&P 500 index for total
shareholder return (the "Shareholder Return Goal")). The cash bonus awards paid
for 1999 with respect to the EPS Goal and Shareholder Return Goal were primarily
in recognition of the progress, as determined by the members of the Board of
Directors who are Independent Directors, made by the Corporation during the year
toward attaining the Goals. An executive officer's goals are designed to reflect
the relationship of his or her responsibilities to the Corporation's EPS Goal
and Shareholder Return Goal. The goals described above may or may not be equally
weighted and will vary from one executive officer to another. The opportunities
for cash bonus awards for the executive officers in 1999 were consistent with
the policies and practices described above.
Based upon comparison of the most recent data provided by the independent
consultants described above, the cash bonuses paid for 1999 to the named
executive officers, taken together with base salaries, were within the fourth
(top) quartile of compensation for comparable officers in the Industrial Company
Group.
Participation Shares and Stock Options
The Corporation maintains the 1992 Equity Participation Plan pursuant to
which stock option grants and long-term incentive awards have been made to
executive officers in 1999 and also maintains the 1986 Equity Participation Plan
(collectively, the "Equity Plans"). The Equity Plans are intended to provide a
means of encouraging the acquisition of an ownership interest in the Corporation
by employees, including executive officers, who contribute materially by
managerial, scientific or other innovative means to the success of the
Corporation, thereby increasing their motivation for and interest in the
Corporation's long-term success.
The 1986 Equity Participation Plan has expired, and no additional awards
can be made under the plan. However, all awards outstanding on the expiration
date remain in effect in accordance with its terms. Only stock option awards are
currently outstanding under the 1986 Equity Participation Plan.
The number of long-term incentive or stock option awards granted to an
executive officer is based principally on the officer's position and the
compensation practices of the Consumer Company Group. The Compensation
Committee's policy is for the value of the awards, on an annualized basis, to be
within the third quartile (that quartile between the 50th and 75th percentiles)
with respect to similar awards made by the companies comprising the group. In
implementing the policy, the Compensation Committee also considers the
individual performance of the officer. The Committee does not determine the size
of the grants by reference to the amount and value of awards currently held by
an executive officer. However, the Compensation Committee takes into account the
timing and nature of prior grants to an executive officer. The payout resulting
from any long-term incentive or stock option award is based on the growth in the
book value (plus the applicable dividend rate) and market value, respectively,
of the Corporation's common stock subsequent to the grant of the awards.
14
<PAGE> 18
The 1992 Plan employs book value through the use of participation shares
and dividend shares, each of which, when awarded, is credited to a participant's
memorandum account. For a description of the material terms of participation
share awards pursuant to the 1992 Plan, see note 5 to the table above entitled
"Summary Compensation Table." No grants of participation shares were made in
1999 and it is the intent of the Compensation Committee that no further awards
of participation shares will be made.
The Equity Plans also employ market value as a basis for rewarding past
performance and as a motivation for future performance through the use of
tax-qualified and nonqualified stock options. For a description of the material
terms of stock option grants pursuant to the Equity Plans, see note 1 to the
table above entitled "Option Grants in 1999."
Restricted Stock Plan
The Corporation adopted, effective January 1, 1999, a restricted stock plan
(the "Restricted Stock Plan") under which selected key employees, including the
executive officers, may be granted awards of restricted stock and restricted
stock units. Participants have the right to vote with respect to the restricted
shares and receive dividends. The restricted stock awards vest three to ten
years from the date of grant at the discretion of the Compensation Committee.
The plan provides that restricted stock units may be paid in cash or shares of
the Corporation's stock, or a combination of both, at the maturity of the award.
It is the policy of the Compensation Committee that awards made pursuant to the
Restricted Stock Plan are to be granted less frequently than awards made
pursuant to the Equity Plans.
1999 Compensation of the Chief Executive Officer
It is the policy of the Compensation Committee to review and adjust the
Chief Executive Officer's salary every two years. The Committee last increased
the salary of the Chief Executive Officer in 1997 based on the policies and
practices described above. The Compensation Committee granted additional stock
options to the Chief Executive Officer in lieu of an increase in his salary in
1999. Based upon comparison of the data provided by the independent consultants
described above, Mr. Sanders' salary in 1999 was in the second quartile (below
the median) of salary levels of the chief executive officers of the Consumer
Company Group. Mr. Sanders' salary is below the target level because of the
Compensation Committee's decision to award additional stock options in 1999
instead of increasing Mr. Sanders' salary.
The cash bonus paid to Mr. Sanders for 1999 was primarily in recognition of
the progress, as determined by the members of the Board of Directors who are
Independent Directors, made by the Corporation during the year toward attaining
the Corporation's EPS Goal and Shareholder Return Goal. Because target levels
with respect to these goals were significantly exceeded during 1999, the bonus
award to Mr. Sanders for 1999 was 200 percent of the target bonus level. Based
upon comparison of the most recent data provided by the independent consultants
described above, the bonus, taken together with Mr. Sanders' base salary, was in
the fourth quartile (above the 75th percentile) of the compensation paid to
chief executive officers of the Industrial Company Group.
Alignment of Executive Compensation with Corporate Performance
The Compensation Committee believes that executive compensation for 1999
adequately reflects its policy to align the compensation with overall business
strategy, values and management initiatives, and to ensure that the
Corporation's goals and performance are consistent with the interests of its
stockholders.
15
<PAGE> 19
Tax Deduction for Executive Compensation
The Committee has determined that it is not in the stockholders' interests
to modify the Corporation's Management Achievement Award Program plan to enable
the Corporation to meet the requirements of the federal tax code provisions
which limit to $1 million the deductibility of annual cash compensation paid to
any executive officer named in the Summary Compensation Table for corporate
income tax purposes. The Committee believes that it is in the stockholders'
interests for the Committee to retain discretion in the awarding of cash bonuses
to the officers to better ensure that the bonus which is paid to each officer
reflects the officer's contribution to the achievement of the Corporation's EPS
Goal and Shareholder Return Goal.
However, the Corporation has adopted a deferred compensation plan in
response to limitations on executive compensation deductibility which allows
each executive officer to defer all salary in excess of $1 million for any
fiscal year. In addition, the deferred compensation plan allows each executive
officer to defer all or a portion of his or her bonus for any fiscal year. While
the deferred compensation plan remains unfunded, in 1994 the Board of Directors
approved the establishment of a trust and authorized the Corporation to make
contributions to the trust in order to provide a source of funds to assist the
Corporation in meeting its liabilities under the deferred compensation plan. The
plan permits the officers to limit their annual cash compensation to the $1
million limitation which may be deducted by the Corporation for federal income
tax purposes. A deferral will result in the possible deduction by the
Corporation of compensation when paid; however, there is no obligation on any
executive officer to defer any amounts during any fiscal year. The Corporation
has determined that the impact to the Corporation of being unable to deduct that
portion of the cash bonus paid to officers which, together with their annual
salary, exceeds $1 million will be minimal. In 1999, the Chief Executive Officer
elected to defer all amounts of his salary and bonus in excess of $1 million.
Furthermore, in order to maximize the deductibility of the compensation
paid to the Corporation's executive officers, the Corporation's 1992 Equity
Participation Plan, as amended, ensures that compensation resulting from the
exercise of stock options and payments made in connection with participation
share awards will be fully deductible.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Louis E. Levy, Chairman
Pastora San Juan Cafferty
Frank A. McPherson
Randall L. Tobias
EXECUTIVE STOCK OWNERSHIP
To further align management's financial interests with those of the
stockholders, the Corporation announced in November 1999, the implementation of
new stock ownership guidelines for approximately 400 key managers, including the
executive officers. Most officers, and all executive officers, are required to
own the Corporation's stock in an amount equivalent to three times their annual
salary. The Chief Executive Officer is required to own an amount of the
Corporation's stock which is six times his annual salary. These guidelines have
been met or exceeded by each of the executive officers.
16
<PAGE> 20
PERFORMANCE GRAPH
Comparison of
Five Year Cumulative Total Return Among
Kimberly-Clark, S&P 500, Former Peer Group & New Peer Group
The New Peer Group index has been changed from the Former Peer Group index
used in the 1999 proxy statement. Pope & Talbot, Inc., Champion International,
Paragon Trade Brands, Inc., International Paper Company and Mead Corporation
have been removed from the index and Georgia-Pacific Corp. and The Gillette
Company have been added to the New Peer Group. In recent years the Corporation
has been undergoing a transition to a global consumer products company based on
a strategy of building on its core technologies, well-known trademarks and
consumer product franchises. In addition, the Corporation has been seeking
opportunities to expand its health care business. Consistent with this strategy,
the Corporation has since 1992 completed over 30 strategic acquisitions and
approximately 20 strategic divestitures. During 1999, the Corporation closed its
pulp mills in Mobile, Alabama and Miranda, Spain and completed the sale of
approximately 530,000 acres of timberlands, significantly reducing its pulp
production. Those companies removed from the Corporation's peer group, were
removed because they are primarily pulp and paper companies. In addition,
Paragon Trade Brands, Inc. filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. Georgia-Pacific Corp. was added
to the New Peer Group because of its significant consumer and away-from-home
tissue businesses. The Gillette Company was added to the New Peer Group because
it is a global consumer product company of similar size to the Corporation. Both
the Former Peer Group and the New Peer Group are included in the presentations
below.
<TABLE>
<CAPTION>
FORMER NEW
CUSTOM PEER GROUP INDEX CUSTOM PEER GROUP INDEX
----------------------- -----------------------
<S> <C>
The Clorox Co. The Clorox Co.
Colgate-Palmolive Company Colgate-Palmolive Company
Fort James Corp. Fort James Corp.
Johnson & Johnson Johnson & Johnson
Paragon Trade Brands, Inc. The Procter & Gamble Company
Pope & Talbot, Inc. Unilever Group
The Procter & Gamble Company Georgia-Pacific Corp.
Unilever Group The Gillette Company
Champion International
International Paper Company
Mead Corporation
</TABLE>
17
<PAGE> 21
The graph below treats as a special dividend the distribution on November
30, 1995 of one share of common stock of Schweitzer-Mauduit International, Inc.
for every 10 shares of the Corporation's common stock held of record on November
13, 1995. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
TOTAL SHAREHOLDER RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD KIMBERLY-
(FISCAL YEAR COVERED) CLARK S&P 500 PEER GROUP
<S> <C> <C> <C>
DEC 93 100.00 100.00 100.00
DEC 94 100.30 101.32 112.71
DEC 95 173.96 139.40 152.57
DEC 96 204.72 171.40 190.86
DEC 97 216.12 228.59 268.94
DEC 98 243.96 293.91 333.34
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the following Directors served, and currently are serving, as
members of the Compensation Committee of the Board of Directors of the
Corporation: Louis E. Levy, Chairman; Pastora San Juan Cafferty; Randall L.
Tobias; and Frank A. McPherson.
Wayne R. Sanders, Chairman of the Board and Chief Executive Officer of the
Corporation, serves as a member of the compensation committee of the board of
directors of Kimberly-Clark de Mexico, S.A. de C.V. Claudio X. Gonzalez,
Chairman of the Board and Managing Director of Kimberly-Clark de Mexico, S.A. de
C.V., serves as a member of the Board of Directors of the Corporation.
18
<PAGE> 22
DEFINED BENEFIT RETIREMENT PLAN
The table below illustrates the estimated annual standard pension benefit
payable upon retirement in 1999 at specified compensation levels and years of
service classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE
------------------------------------------------------------------------------------
15 20 25 30 35 40 45
REMUNERATION YEARS YEARS YEARS YEARS YEARS YEARS YEARS
- ------------ -------- -------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000............ $ 45,000 $ 60,000 $ 75,000 $ 90,000 $ 105,000 $ 120,000 $ 135,000
400,000........... 90,000 120,000 150,000 180,000 210,000 240,000 270,000
600,000........... 135,000 180,000 225,000 270,000 315,000 360,000 405,000
800,000........... 180,000 240,000 300,000 360,000 420,000 480,000 540,000
1,000,000........... 225,000 300,000 375,000 450,000 525,000 600,000 675,000
1,200,000........... 270,000 360,000 450,000 540,000 630,000 720,000 810,000
1,400,000........... 315,000 420,000 525,000 630,000 735,000 840,000 945,000
1,600,000........... 360,000 480,000 600,000 720,000 840,000 960,000 1,080,000
1,800,000........... 405,000 540,000 675,000 810,000 945,000 1,080,000 1,215,000
2,000,000........... 450,000 600,000 750,000 900,000 1,050,000 1,200,000 1,350,000
2,200,000........... 495,000 660,000 825,000 990,000 1,155,000 1,320,000 1,485,000
2,400,000........... 540,000 720,000 900,000 1,080,000 1,260,000 1,440,000 1,620,000
2,600,000........... 585,000 780,000 975,000 1,170,000 1,365,000 1,560,000 1,755,000
2,800,000........... 630,000 840,000 1,050,000 1,260,000 1,470,000 1,680,000 1,890,000
3,000,000........... 675,000 900,000 1,125,000 1,350,000 1,575,000 1,800,000 2,025,000
</TABLE>
The compensation covered by the Corporation's defined benefit plan for
which the above table is provided includes the salary and bonus information set
forth in the Summary Compensation Table. The estimated years of benefit service,
as of normal retirement at age 65, for the executive officers named in the
Summary Compensation Table are: John W. Donehower, 37.0 years; O. George
Everbach, 19.7 years; Thomas J. Falk, 40.0 years; Wayne R. Sanders, 37.1 years;
and Kathi P. Seifert, 36.2 years. Under the plan, an employee is entitled to
receive an annual standard benefit based on years of benefit service and
integrated with social security benefits. Benefits under the plan will be
limited to the extent required by the Internal Revenue Code of 1986, as amended,
with excess benefits over this limitation being paid pursuant to supplemental
plans. While these supplemental plans remain unfunded, in 1994 the Board of
Directors approved the establishment of a trust and authorized the Corporation
to make contributions to this trust in order to provide a source of funds to
assist the Corporation in meeting its liabilities under the plans. Each of the
executive officers named in the Summary Compensation Table is a participant in
these supplemental plans.
Retirement benefits for participants who have at least five years of
vesting service may begin on a reduced basis at age 55, or on an unreduced basis
at normal retirement age. Unreduced benefits also are available for participants
with 10 years of vesting service at age 62 or as early as age 60 with 30 years
of vesting service. The normal form of benefit is a single-life annuity payable
monthly.
Benefits will be actuarially adjusted if the employee receives one of the
available forms of joint and survivor or other optional forms of benefit. In
addition, each participant in the supplemental plans has the option of receiving
an actuarially determined lump sum payment upon retirement after age 55 in lieu
of the monthly payments which otherwise would be payable to the participant
under the plans. Further, in the event of a change of control of the Corporation
or a reduction in the Corporation's long-term credit rating below investment
grade, each participant would have the option of receiving the present value of
his or her accrued benefits in the supplemental plans at that time in a lump
sum, reduced by 10% and 5% for active and former employees, respectively.
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EXECUTIVE SEVERANCE PLAN
The Corporation's Executive Severance Plan (the "Executive Severance Plan")
provides that in the event of termination of a participant's employment with the
Corporation for any reason (other than death or disability) within two years
after a change of control of the Corporation, as defined in the plan, the
participant will receive a cash payment in an amount equal to the sum of (i)
three times base salary and the maximum management achievement award, (ii) the
value, based on the Corporation's stock price on the date of the change in
control or the participant's termination, whichever is greater, of unmatured or
unexercised awards or grants under the Corporation's Equity Participation Plans
and the Restricted Stock Plan, and (iii) the value of nonvested benefits under
the Salaried Employees Incentive Investment Plan and successor plans. The plan
also provides for monthly supplemental retirement benefits equal to those that
would have accrued had employment continued for an additional three years, for
certain relocation costs, and for the continuation of certain other benefits for
varying periods of up to three years. The plan also provides for a reduction in
its benefits otherwise payable if, due to the application of Section 280G of the
Internal Revenue Code of 1986, the reduction would result in equal, or greater
net after tax benefits to the participant. The Board has determined the
eligibility criteria for participation in the plan. A participant ceases to be a
participant in the plan when notified by the Board that it has determined that
the participant has ceased to be a key executive for purposes of the plan. The
Corporation has agreements under the plan with each executive officer who is
named in the Summary Compensation Table.
CORPORATION'S SEVERANCE PAY PLAN
The Corporation's Severance Pay Plan generally provides eligible employees
(including the executive officers) a lump sum severance payment of one week's
pay for each year of employment in the event of involuntary termination without
cause. The minimum severance payment is six week's pay and the maximum is 26
week's pay. Benefits under this plan will not be paid to an executive officer in
the event benefits are payable under the Executive Severance Plan.
COMPENSATION OF DIRECTORS
Directors who are not officers or employees of the Corporation or any of
its subsidiaries, affiliates or equity companies receive an annual cash retainer
of $35,000 payable pro rata quarterly in advance, and a daily attendance fee of
$1,200 per meeting for each day or fraction thereof spent in attendance at a
meeting of the Board or any committee, subject to a maximum of $3,600 for any
day on which more than one meeting is held. Pursuant to the Outside Directors'
Stock Compensation Plan, these directors also receive 600 shares of common stock
of the Corporation on December 31 of each year, and cash dividends and accrued
interest thereon are credited to an account maintained by the Corporation. All
of the shares granted under this plan, together with all cash dividends and
accrued interest, are restricted and nontransferable until, and will be
delivered to a director free of restrictions upon, his or her termination as a
member of the Board. In addition, the Corporation reimburses these directors for
expenses incurred as a result of attending Board or committee meetings. A
director who is an officer or an employee of the Corporation or any of its
subsidiaries, affiliates or equity companies does not receive any fees for
services as a member of the Board or any committee, but is reimbursed for
expenses incurred as a result of the service.
Under the deferred compensation plan for directors of the Corporation,
directors who are not officers or employees of the Corporation or any of its
subsidiaries, affiliates or equity companies may make an irrevocable election to
defer receipt of all or a portion of their annual cash retainer and meeting fees
for any year. Compensation of a director that is deferred under the plan is
credited either to a cash account or a stock account, as provided in the
election. Amounts allocated to a cash account are converted into cash credits
and will earn additional cash credits quarterly at a rate of one-fourth of the
per annum rate of either six percent or the rate paid from time to time on
six-month U.S. Treasury Bills, whichever is higher. Amounts allocated to a stock
account are converted into stock credits equal to the number of shares of common
stock of the Corporation which could have
20
<PAGE> 24
been purchased with the amounts. A participant's stock account also is credited
with additional stock credits based on the amount of any dividends paid on the
Corporation's common stock. Cash credits and stock credits are converted to and
paid in cash at the time of distribution on the date elected by a participant,
and with respect to stock credits, based on the price of a share of common stock
of the Corporation. Stock credits are not shares of stock; no shares of the
Corporation's common stock are ever distributed to a participant under the plan;
and no participant acquires any rights as a holder of common stock under the
plan. All accounts are distributed in one to 20 annual installments, as elected
by the participant, or upon death.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE FIVE NOMINEES FOR DIRECTOR.
PROPOSAL 2. APPROVAL OF AUDITOR
The Audit Committee of the Board of Directors has selected, and the Board
of Directors has approved, Deloitte & Touche LLP as the principal independent
auditor to audit the financial statements of the Corporation for 2000, subject
to ratification by the stockholders. If the stockholders do not approve the
selection of Deloitte & Touche LLP, the selection of another independent auditor
will be considered by the Audit Committee. Deloitte & Touche LLP has been the
independent auditor for the Corporation since its incorporation in 1928.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THIS
SELECTION.
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, executive officers and any persons owning more than 10
percent of a class of the Corporation's stock to file reports with the
Securities and Exchange Commission and The New York Stock Exchange regarding
their ownership of the Corporation's stock and any changes in ownership. We
believe that the Corporation's executive officers and directors complied with
their filing requirements for 1999.
2001 STOCKHOLDER PROPOSALS
Proposals by stockholders for inclusion in the Corporation's 2001 Proxy
Statement and form of proxy for the Annual Meeting of Stockholders to be held in
2001 should be addressed to the Secretary, Kimberly-Clark Corporation, P. O. Box
619100, Dallas, Texas 75261-9100, and must be received at this address no later
than November 8, 2000. Upon receipt of a proposal, the Corporation will
determine whether or not to include the proposal in the Proxy Statement and
proxy in accordance with applicable law. It is suggested that proposals be
forwarded by certified mail - return receipt requested.
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS
The Corporation's By-Laws require advance notice for any business to be
brought before a meeting of stockholders. In general, for business to properly
be brought before an annual meeting by a stockholder (other than in connection
with the election of directors; see "Proposal 1. Election of
Directors - Stockholder Nominations for Directors"), written notice of the
stockholder proposal must be received by the Secretary of the Corporation not
less than 75 days nor more than 100 days prior to the first anniversary of the
preceding year's annual meeting. Certain other notice periods are provided if
the date of the annual meeting is advanced by more than 30 days or delayed by
more than 60 days from the anniversary date. The stockholder's notice to the
Secretary must contain a
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<PAGE> 25
brief description of the business to be brought before the meeting and the
reasons for conducting such business at the meeting, as well as certain other
information. Additional information concerning the advance notice requirement
and a copy of the Corporation's By-Laws may be obtained from the Secretary of
the Corporation at the address provided below.
OTHER MATTERS
The management of the Corporation knows of no other matters to be presented
at the meeting. Should any other matter requiring a vote of the stockholders
arise at the meeting, the persons named in the proxy will vote the proxies in
accordance with their best judgment.
By order of the Board of Directors.
/s/ RONALD D. MCCRAY
Ronald D. Mc Cray
Vice President and Secretary
KIMBERLY-CLARK CORPORATION
P. O. Box 619100
Dallas, Texas 75261-9100
Telephone (972) 281-1200
March 8, 2000
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[Kimberly Clark Corporation Logo]
Invitation to Stockholders
Notice of 2000 Annual Meeting
Proxy Statement
[GRAPHIC]
<PAGE> 27
[KIMBERLY-CLARK CORPORATION LOGO]
DETACH HERE
[KIMBERLY-CLARK CORPORATION LOGO]
P.O. BOX 619100, DALLAS, TEXAS 75261-9100
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 13, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Wayne R. Sanders, O. George Everbach and Ronald D. Mc Cray, or any of them,
with full power of substitution to each, hereby are appointed proxies and are
authorized to vote, as specified below, all shares of common stock that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of
Kimberly-Clark Corporation, to be held at the Corporation's World Headquarters,
351 Phelps Drive, Irving, Texas on April 13, 2000 at 11:00 a.m. and at any
adjournment thereof. In their discretion, the proxies are authorized to vote on
such other business as may properly come before the meeting.
Please date, sign and return this proxy promptly. If you plan to attend the
meeting, please so indicate in the space provided on the reverse side.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. IF
YOU PREFER TO VOTE SEPARATELY ON INDIVIDUAL ISSUES YOU MAY DO SO BY MARKING THE
APPROPRIATE BOXES ON THE REVERSE SIDE.
IMPORTANT: TO BE SIGNED AND DATED ON THE REVERSE SIDE
PLEASE RETURN THIS CARD IN THE SELF-ADDRESSED ENVELOPE PROVIDED.
<PAGE> 28
KIMBERLY-CLARK CORPORATION
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
VOTE BY TELEPHONE
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683)
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683). Stockholders
residing outside the United States may call collect on a touch-tone phone
1-201-536-8073.
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the recorded instructions.
YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime!
VOTE BY INTERNET
It's fast, convenient, and your vote is immediately confirmed and posted.
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Go to the Website http://www.eproxyvote.com/kmb
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the instructions provided.
YOUR VOTE IS IMPORTANT!
Go to http://www.eproxyvote.com/kmb anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
DETACH HERE
[X] Please mark your
votes as in the
example.
It is not necessary to complete the information under proposals 1 and 2 below
unless you choose to cause your shares to be voted separately on each matter to
be brought before the Annual Meeting of Stockholders.
[The Board of Directors recommends a vote FOR proposals 1 and 2.]
<TABLE>
<S> <C> <C>
1. Election of Directors 2. Selection of Auditor
Nominees: (01) Thomas J. Falk, (02) William O. Fifield,
(03) Wayne R. Sanders, (04) Wolfgang R. Schmitt FOR AGAINST ABSTAIN
and (05) Randall L. Tobias (terms to expire [ ] [ ] [ ]
at 2003 Annual Meeting of Stockholders)
[ ] FOR [ ] WITHHOLD
all AUTHORITY
nominees to vote
for all
nominees
[ ] MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
- ------------------------------
FOR all nominees, except vote
withheld for those named above.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT [ ]
LOWER LEFT [ ]
I WILL BE ACCOMPANIED BY .
--------------------------------------
PLEASE SIGN BELOW EXACTLY AS NAME APPEARS HEREON. JOINT OWNER'S
SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS
SUCH. IF SIGNING IN THE NAME OF A CORPORATION OR PARTNERSHIP,
PLEASE SIGN FULL CORPORATE OR PARTNERSHIP NAME AND INDICATE
TITLE OF AUTHORIZED SIGNATORY.
Signature: Date: Signature: Date
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</TABLE>
